Why psychology is getting popular amongst new-age digital companies

Dr Swaranjeet Arora

The world is undergoing a massive digital transformation. Digitalisation as a concept involves leveraging digital technologies and processes for creating better opportunities for businesses and companies. The new-age digital companies such as EdTech, E-commerce, Digital Marketing companies populate the contemporary business scenario and are perhaps one of the fastest growing sectors across the world.

The process of digital transformation (as encouraged by digital companies) is akin to psychological transformation. In other words, the process of digitalisation involves a range of psychological components such as motives facilitating digital adoption, attitudinal resistance to technology, openness to change, self-efficacy, and so on and so forth. This is one of the reasons why psychology has become one of the most sought-after degrees by digital companies.

Here are top ten reasons highlighting the popularity of psychology in context of new age digital companies:

1. Knowledge of psychology helps build critical thinking necessary to navigate a world of data and technology

We are currently living in an age characterised by big data and artificial intelligence. Almost every area or aspect of our lives is influenced by technology in one way or the other, be it networking on social media platforms, using wearable tech gadgets to gain biofeedback information or even using application to order our daily essentials such as groceries and vegetables. We spend a large portion of our day multitasking and navigating technological landscapes. Psychology as a disciplines thinking, problem solving, reflection, and self-awareness, knowledge of psychology enables an individual to effectively deal with the complexities and challenges of an digitized encouragement world.

2. A background in psychology facilitates an understanding of how humans interact with technology

On a normal day, we might interact with myriad forms of technology. Some of these interactions can be characterized as smooth and easy (for example connecting your phone’s Bluetooth with another device), while some might prove to be more challenging (such as using online platforms for communication). Depending on the scale and duration of interaction, different age groups may respond differently to technology. Its possible that a seven-year child gets excited on getting to play on an iPad but a seventy-year-old individual feels annoyed by the new software updates on his laptop. Thus, a sound understanding of various modes of human – technology interaction can provide useful information to digital companies that thrive on these interactions.

3. Psychology can provide an in-depth understanding of technology assisted learning styles and patterns

India has around 3000 EdTech Start-ups currently. According to KPMG’s “Online education in India: 2021” report, the EdTech industry in India could be worth $1.96 Billion by 2021. In covid times, the education sector across the world has especially demonstrated tremendous resilience and adaptability in adopting new avenues of teaching and learning. At the same time, there has been an increase in the number of platforms that offer online courses and degrees. Thus, there is an emphasis on technology enabled education that combines elements of both traditional and modern pedagogical methods. Psychology can help identify, comprehend and compare the role of technology in learning styles and patterns of students.

4. Knowledge of psychology can help map consumer preferences and buying choices

E-commerce websites such as Amazon, Flipkart, etc. offer a unique online shopping experience to its buyers. One of the objectives of E-commerce companies involves motivating consumers/buyers to shift from the traditional mode of shopping to internet shopping. Right from product display to product information, the online shopping experience is curated in a way that is appealing, convenient and cost effective. Psychological knowledge can help these companies design effective product selling strategies based on systematic study of individual buying motives and preferences.

5. Psychology can help recognise biases in AI functioning

Many job sectors that were previously labor-intensive (for example textile, farming etc.) are now moving towards computerization or automation. Automation is said to replace jobs that are mechanical or repetitive or can be easily performed by a machine. However, it cannot replace jobs that require unique human attributes or qualities such as abstract thinking, empathy, original thinking, and thus in areas such as this psychological knowledge can help identify biases or limitations that might emerge from AI functioning. Psychology can also provide inputs on how to develop better coordination between human thinking and AI systems.

6. Psychology draws from multicultural perspectives

Psychological concepts are drawn from diverse fields of study such as cognitive psychology, sociology, philosophy, anthropology, political science and economics. As we live in societies that are socially complex and multiculturally diverse, knowledge of varied disciplines and perspectives individuals and organizations to deal with diversity in an inclusive and responsible manner. It also helps enhance a company’s brand appeal and relevance amongst different sections of society.

7. A background in psychology helps companies keep pace with changing work culture and employee expectations

The ideas and notions around work are constantly evolving. A socially diverse workforce calls for novel techniques of employee engagement. Industrial and organizational psychologists are especially concerned with topics such as job satisfaction, organizational commitment, job partnership, workplace motivation, high etc. Knowledge of psychological principles can help companies better understand employee attitudes, behaviors and expectations as well as their linkages to effective performance, thereby enabling them to design appropriate HR policies.

8. Psychology emphasizes on scientific methods of understanding human behavior

Many psychological theories explaining human behavior (under different circumstances) are based on strong scientific principles of objectivity, empiricism, reliability and validity. In other words, psychology derives its knowledge from scientific evidence that is credible and trustworthy.

9. New-age companies are relationship oriented – wanting to serve the customer in the best possible manner

The digital landscape is also characterized by an emphasis on interconnectivity and relationships. A loyal customer base is possible only through investing in the company – customer relationship and creating networks that can be sustained across long periods of time. Psychological understanding of human relationships can provide for ways of building meaningful connections and modes of exchange between an institution and its consumers.

10. Psychology can help organizations develop a healthy and productive work environment

Finally, a work environment that cares for its employees’ well being and mental health can go a long way in reducing employee absenteeism, turnover and even counterproductive employee behaviors.

The writer is Professor and Head of the Department, School of Management & Liberal Studies The NorthCap University, Gurugram

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